In SWI 2022, 66, Helmut Loukota dealt with an income allocation conflict that had been decided by the Austrian Federal Tax Court. The Court’s decision, however, did not follow the relevant principles of the OECD’s Partnership Report incorporated into the Commentary of the OECD Model and, in particular, the principles of subsection E of the Commentary on Articles 23A and 23B OECD Model. In SWI 2022, 118, Michael Lang argued that the determination of who is the taxpayer was an exclusive matter of domestic law. As a consequence, neither the method article of the OECD Model nor subsection E of the respective Commentary could be used for resolving such subject-based conflicts of qualification. Subsection E, therefore, would only be of relevance for object-based conflicts.

This deviating standpoint has prompted a somewhat deeper analysis of the case that should now show in full clarity that the principles laid down in subsection E are an essential and even indispensable tool for reaching a solution that is fully in line with the interpretation principles of Article 31 Vienna Convention on the Law of Treaties. The technique to be applied in this respect is made visible in tabular form in t...